Indian government announces free health-insurance to cover 500 million people.

India announced Thursday a program to give half a billion citizens free health insurance, a potentially transformative upgrade of the country’s dilapidated public health-care services and a key element of Prime Minister Narendra Modi’s government’s last budget before national elections next year. […]

Under the plan, the government will cover health-care costs of up to $7,800 for 100 million poor families and spend some $188 million to create “health and wellness” centers, Jaitley announced to loud table-thumping in India’s lower house. Spending on nutrition for tuberculosis patients, cleanliness drives and education will also result in significant improvements in public health, he said. […]

Healthcare in India tends to be mercenary, with hospitals often refusing treatment unless patients produce large sums of cash first. So the poorest Indians often go without care. Within the Indian context, $7,800 is a huge sum, represent 4 years of income on average. A current program covers $500 of costs for poor families. This program would increase that 15 fold.

So this is a welcome development from a decidedly right-wing government which has in general been skeptical of poverty-reduction programs. The health-care program and strong statements in favor of farm-support bills are meant to counter this perception among poorer Indians who do vote in large numbers since elections are run by a non-partisan commission and voter-suppression is rare.

The government’s funding plan is very unclear. Even with India’s extremely young population (which means lower overall need), the cost for such a program will run into the billions. The government has yet to outline how it will fund the proposal, apart from announcing a surtax that is expected to raise $1.7 Billion. A detailed budget is expected next week and should clarify this.

There are also questions about how coverage will work with the mercenary private sector, which often charges inflated prices. Then there’s the fact that India’s poorest citizens are disproportionately Muslim or from “lower” castes who have historically not supported the right-wing BJP. Implementation details will determine whether or not these communities benefit from the program.